News Release Details

KP Tissue Releases Fourth Quarter and Full Year 2018 Financial Results

March 7, 2019 at 7:00 AM EST
Strong revenue with continued cost headwinds

MISSISSAUGA, Ontario, March 07, 2019 (GLOBE NEWSWIRE) -- KP Tissue Inc. (KPT) (TSX: KPT) reports the Q4 2018 and full year 2018 financial and operational results of KPT and Kruger Products L.P. (KPLP). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere, Purex, SpongeTowels, Scotties, and White Swan) and the Away-From-Home market, and continues to grow in the U.S. Consumer tissue business with the White Cloud® brand and premium private label products. KPT currently holds a 15.7% interest in KPLP.

KPLP Q4 2018 Business and Financial Highlights

  • Revenue increased by 5.7% to $359.5 million in Q4 2018 compared to Q4 2017
  • Adjusted EBITDA was $20.3 million in Q4 2018 compared to $33.7 million in Q4 2017
  • Pulp and freight costs continued to escalate in the quarter
  • Completed TAD2 financing and the project is progressing on time and on budget
  • Signed a multi-year partnership agreement with the NHL
  • Declared a quarterly dividend of $0.18 per share to be paid on April 15, 2019         

KPLP Full Year 2018 Business and Financial Highlights

  • Revenue increased by 7.1% to $1,370.4 million in 2018 compared to $1,280.0 million in 2017
  • Adjusted EBITDA was $102.3 million in 2018, down from $144.2 million in 2017

“We are pleased by our strong revenues for the year and for reaching another record level, however high pulp prices and freight costs, prevalent throughout 2018, led to disappointing results for the year. KP Tissue’s countermeasures such as our value creation program and capital projects partially offset these higher input costs. The price increase announced last year in the Canadian consumer business will provide some relief starting in the first quarter of 2019. With the support of a third party consultant, we are initiating an operational excellence program to better leverage our assets, which is projected to result in cost savings of between $15 and $20 million on a run-rate basis by the end of 2020,” said Dino Bianco, CEO of KP Tissue and KPLP.

“Our TAD2 project remains on budget and on track with construction starting this spring, setting the stage for a new growth phase. We are also very proud to have recently signed a multi-year agreement with the NHL allowing us to create innovative and fully integrated programs and promotions to further extend our brand leadership in both Consumer and Away-From-Home”, concluded Mr. Bianco.

Outlook
KPLP continues to have strong long-term business fundamentals and will benefit from the Consumer Canada price increase implemented in Q4 2018.  While the price increase will gain traction in the first quarter, Adjusted EBITDA is anticipated to be lower than the comparable quarter in 2018 due to continued pressure from high input costs.

TAD2 Project
On August 16, 2018, KPLP announced its plan for a capital investment of $575 million in the Brompton area of Sherbrooke, Quebec, to build a new, state-of-the-art tissue plant featuring Canada’s largest and most modern TAD paper machine along with related converting equipment and infrastructure (the TAD2 Project). The TAD2 Project is projected to produce at maturity approximately 70,000 metric tonnes per annum of bathroom tissue and paper towels which will enable KPLP to increase its offering of ultra-premium and innovative tissue projects under the Cashmere, Sponge Towels and Purex brands and also enable expansion in the U.S. private label business. Construction of the new site is expected to begin in the spring of 2019 and commence production in early 2021.

Financing of the TAD2 Project
On November 19, 2018, KPLP announced that it had closed financing transactions to fund the TAD2 Project. The financings include the TAD2 Project Facility, the KTG Facility, the Convertible Debenture and the Nordea 2 Facility, as well as a $50 million factoring facility made available to KPLP under a receivables purchase agreement with The Bank of Nova Scotia. KPLP will use funds from the Nordea 2 Facility and the factoring facility as well as cash on hand to fund a $125 million equity investment in Kruger Products Sherbrooke Inc. (KPSI), with half of such investment having occurred upon the closing of the financings and the remainder to be funded over the following two years. Funds from the KTG Facility were used to refinance existing indebtedness of TAD Canco Inc. incurred for the TAD1 project under a credit agreement with Caisse de dépôt et placement du Québec. The Project Facility and the KTG Facility are both non-recourse to KPLP. In connection with the financings, the Senior Credit Facility and the Nordea Credit Facility were amended to, amongst other things, amend certain covenants to increase the amount of permitted debt for borrowed money.

KPLP Q4 2018 Financial Results
Revenue was $359.5 million in Q4 2018 compared to $340.0 million in Q4 2017, an increase of $19.5 million or 5.7%. The increase in revenue was primarily due to the Consumer Canada selling price increase implemented in Q4 2018, the favourable impact of foreign exchange fluctuations on U.S. sales, and increased sales volume in Mexico, partially offset by 6 fewer days of sales in Q4 2018 compared to Q4 2017.

Cost of sales was $328.5 million in Q4 2018 compared to $296.0 million in Q4 2017, an increase of $32.5 million or 11.0%. Manufacturing costs increased primarily due to higher pulp costs, increased sales volume, the cost of outsourced manufacturing and the unfavourable impact of foreign exchange fluctuations on USD denominated costs. The benefits from cost reduction initiatives and capital projects partially offset other manufacturing cost inflation. Freight costs increased primarily due to higher carrier rates and increased sales volume. As a percentage of revenue, cost of sales were 91.4% in Q4 2018 compared to 87.1% in Q4 2017.

Selling, general and administrative (SG&A) expenses were $24.2 million in Q4 2018 compared to $23.7 million in Q4 2017, an increase of $0.5 million or 2.1%. As a percentage of revenue, SG&A expenses were 6.7% in Q4 2018 compared to 7.0% in Q4 2017.

Adjusted EBITDA was $20.3 million in Q4 2018 compared to $33.7 million in Q4 2017, a decrease of $13.4 million. The decrease was primarily due to significantly higher fibre and freight costs, 6 fewer days of sales in Q4 2018 compared to Q4 2017, the cost of outsourced manufacturing, unfavourable sales mix and the net unfavourable impact of foreign exchange fluctuations, partially offset by the Q4 2018 Consumer Canada selling price increase.

Net income was $38.0 million in Q4 2018 compared to a net loss of $18.0 million in Q4 2017, an increase of $56.0 million. The increase was primarily due to an increase in the change in amortized cost of partnership units liability of $61.5 million and a change in income taxes of $9.8 million. These items were partially offset by lower Adjusted EBITDA of $13.4 million and an increase in interest expense of $1.8 million.

Total liquidity, representing cash and cash equivalents and availability under the credit line within covenant limitations, was $178.7 million as of December 31, 2018, including $129.1 million of cash and cash equivalents held by KPSI and committed to the TAD2 Project, compared to $63.6 million as of September 30, 2018.

KPLP 2018 Financial Results
Revenue was $1,370.4 million in Fiscal 2018 compared to $1,280.0 million in Fiscal 2017, an increase of $90.4 million or 7.1%. The increase in revenue was primarily due to the favourable impact of increased sales volume and the Consumer Canada selling price increases implemented in Q4 2017 and Q4 2018.

Adjusted EBITDA was $102.3 million in Fiscal 2018 compared to $144.2 million in Fiscal 2017, a decrease of $41.9 million or 29.1%. The decrease was primarily due to significantly higher fibre and freight costs, the cost of outsourced manufacturing and unfavourable sales mix, partially offset by increased sales volume and the Consumer Canada price increases.  

Net income was $45.4 million in Fiscal 2018 compared to $15.3 million in Fiscal 2017, an increase of $30.1 million. The increase was primarily due to an increase in the change in amortized cost of Partnership units liability of $64.9 million and a decrease in income taxes of $16.0 million. These items were partially offset by lower Adjusted EBITDA of $41.9 million as discussed above, an increase in interest expense of $6.0 million, and a change in foreign exchange gain (loss) of $2.9 million.

KPT Q4 2018 Financial Results
KPT earned net income of $2.7 million in Q4 2018. Included in the net income was $6.0 million representing KPT’s share of KPLP’s income. The income was reduced by depreciation expense of $1.5 million related to adjustments to carrying amounts on acquisition and an income tax expense of $1.9 million.

KPT 2018 Financial Results
KPT incurred a net loss of $0.3 million in 2018. Included in the net loss was $7.2 million representing KPT’s share of KPLP’s income. The income was reduced by depreciation expense of $5.8 million related to adjustments to carrying amounts on acquisition and income tax expense of $1.9 million

Dividends on Common Shares                                                     
The Board of Directors of KPT declared a quarterly dividend of $0.18 per share to be paid on April 15, 2019 to shareholders of record at the close of business on April 1, 2019.

Additional Information
For additional information please refer to Management’s Discussion and Analysis (MD&A) of KPT and KPLP for the fourth quarter ended December 31, 2018 available on SEDAR at www.sedar.com or our website at www.kptissueinc.com.

Fourth Quarter Results Conference Call Information
KPT will hold its fourth quarter conference call on Thursday, March 7, 2019 at 8:30 a.m. Eastern Time.

Via telephone:  1-877-223-4471 or 647-788-4922

Via the internet at: www.kptissueinc.com

Presentation material referenced during the conference call will be available at www.kptissueinc.com.

A rebroadcast of the conference call will be available until midnight, March 14, 2019 by dialing 1-800-585-8367 or 416-621-4642 and entering passcode 5517909.

The replay of the webcast will remain available on the website until midnight, March 14, 2019.

About KP Tissue Inc. (KPT)
KPT was created to acquire, and its business is limited to holding, a limited partnership interest in KPLP, which is accounted for as an investment on the equity basis. KPT currently holds a 15.7% interest in KPLP. For more information visit www.kptissueinc.com.

About Kruger Products L.P. (KPLP)
KPLP is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. KPLP serves the Canadian consumer market with such well-known brands as Cashmere®, Purex®, SpongeTowels®, Scotties® and White Swan®. In the U.S., KPLP manufactures the White Cloud® brand, as well as many private label products. The Away-From-Home division manufactures and distributes high-quality, cost-effective product solutions to a wide range of commercial and public entities. KPLP has approximately 2,500 employees and operates eight FSC® COC-certified (FSC® C-104904) production facilities in North America.  For more information visit www.krugerproducts.ca.

Non-IFRS Measures
This press release uses certain non-IFRS financial measures which KPLP believes provide useful information to management of KPLP and the readers of the financial information in measuring the financial performance and financial condition of KPLP. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other companies. An example of such a measure is Adjusted EBITDA. Beginning with Q4 2015 in accordance with Canadian Securities Administrators Staff Notice 52-306 (Revised), we have referenced Adjusted EBITDA as a non-IFRS financial measure. This term replaces the previously referenced non-IFRS financial measure EBITDA. Our definition of Adjusted EBITDA is unchanged from our former definition of EBITDA. Accordingly, this change in terminology has no impact on our reported financial results for prior periods. Adjusted EBITDA is not a measurement of operating performance computed in accordance with IFRS and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with IFRS. “Adjusted EBITDA” is calculated by KPLP as net income (loss) before (i) interest expense, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) impairment (gain on sale) of non-financial assets, (vi) loss (gain) on disposal of property, plant and equipment, (vii) foreign exchange loss (gain), (viii) costs related to restructuring activities, (ix) changes in amortized cost of Partnership units liability, and (x) one-time costs due to pension revaluations related to past service. A reconciliation of Adjusted EBITDA to the relevant reported results can be found in the MD&A of KPT and KPLP for the fourth quarter ended December 31, 2018 available on SEDAR at www.sedar.com.

Forward-Looking Statements
Certain statements in this press release about KPT’s and KPLP's current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding the projected capacity of the TAD2 Project, the anticipated benefits of the TAD2 Project and the expected dates for commencement of construction and production of the TAD2 Project. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. The forward-looking statements are based on certain key expectations and assumptions made by KPT or KPLP. Although KPT and KPLP believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking statements since no assurance can be given that such expectations and assumptions will prove to be correct.

The outlook provided in respect of Adjusted EBITDA for Q1 2019 is forward-looking information and is subject to the risk and uncertainties referred to below. The purpose of the outlook is to provide the reader with an indication of management’s expectations, at the date of this press release, regarding KPLP’s future financial performance. Readers are cautioned that this information may not be appropriate for other purposes.  

Many factors could cause KPLP’s actual results, level of activity, performance or achievements or future events or developments (which could in turn affect the economic benefits derived from KPT’s economic interest in KPLP), to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the “Risk Factors – Risks Related to KPLP’s Business” section of the KPT Annual Information Form dated March 8, 2019 available on SEDAR at www.sedar.com: Kruger Inc.’s influence over KPLP; KPLP’s reliance on Kruger Inc.; consequences of an event of insolvency relating to Kruger Inc.; risks associated with the TAD2 Project; operational risks; Gatineau Plant land lease; significant increases in input costs; reduction in supply of fibre; increased pricing pressure and intense competition; KPLP’s inability to innovate effectively; adverse economic conditions; dependence on key retail trade customers; damage to the reputation of KPLP or KPLP’s brands; KPLP’s sales being less than anticipated; KPLP’s failure to implement its business and operating strategies; KPLP’s obligation to make regular capital expenditures; KPLP’s entering into unsuccessful acquisitions; KPLP’s dependence on key personnel; KPLP’s inability to retain its existing customers or obtain new customers; KPLP’s loss of key suppliers; KPLP’s failure to adequately protect its intellectual property rights; KPLP’s reliance on third party intellectual property licenses; adverse litigation and other claims affecting KPLP; material expenditures due to comprehensive environmental regulation affecting KPLP’s cash flow; KPLP’s pension obligations are significant and can be materially higher than predicted if KPLP Management’s underlying assumptions are incorrect; labour disputes adversely affecting KPLP’s cost structure and KPLP’s ability to run its plants; exchange rate and U.S. competitors; KPLP’s inability to service all of its indebtedness; exposure to potential consumer product liability; covenant compliance; interest rate and refinancing risk; and risks relating to information technology; cyber-security; insurance; internal controls; and trade.

Readers should not place undue reliance on forward-looking statements made herein. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of press release and KPT undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.

INFORMATION:

Francois Paroyan
General Counsel and Corporate Secretary
KP Tissue Inc.
Tel.: 905.812.6936
francois.paroyan@krugerproducts.ca

INVESTORS:

Mike Baldesarra
Director of Investor Relations
KP Tissue Inc.
Tel.: 905.812.6962
IR@KPTissueinc.com

 

Kruger Products L.P.
Consolidated Statement of Financial Position
(thousands of Canadian dollars)
           
  December 31, 2018     December 31, 2017  
  $     $  
Assets          
Current assets          
Cash and cash equivalents   169,884       8,837  
Trade and other receivables    127,633       113,194  
Receivables from related parties   172       85  
Current portion of advances to partners   -        1,928  
Inventories    202,916       192,394  
Income tax recoverable    362       522  
Prepaid expenses    6,904       8,007  
    507,871       324,967  
Non-current assets          
Advances to partners   1,704       4,489  
Property, plant and equipment    786,022       761,610  
Other long-term assets    10       6,331  
Goodwill   160,939       160,939  
Intangible assets    14,924       15,327  
Deferred income taxes    33,440       26,092  
Total assets   1,504,910       1,299,755  
Liabilities          
Current liabilities          
Bank indebtedness   -        9,051  
Trade and other payables    238,856       190,698  
Payables to related parties   5,620       2,596  
Income tax payable   80       498  
Distributions payable    10,723       10,382  
Current portion of provisions    292       333  
Current portion of long-term debt    13,939       190,947  
    269,510       404,505  
Non-current liabilities          
Long-term debt    563,955       225,368  
Provisions    5,398       5,973  
Pensions    104,939       119,558  
Post-retirement benefits    54,051       60,457  
Liabilities to non-unitholders   997,853       815,861  
Current portion of Partnership units liability    -        1,928  
Long-term portion of Partnership units liability    116,524       158,381  
Total Partnership units liability    116,524       160,309  
Total liabilities   1,114,377       976,170  
Equity          
Partnership units   376,274       356,240  
Deficit   (78,780 )     (99,742 )
Accumulated other comprehensive income   93,039       67,087  
Total equity   390,533       323,585  
Total equity and liabilities   1,504,910       1,299,755  


Kruger Products L.P.
Consolidated Statement of Comprehensive Income (Loss)
(thousands of Canadian dollars)
                       
  3-month
period ended
December 31, 2018
    3-month
period ended
December 31, 2017
    12-month
period ended
December 31, 2018
    12-month
period ended
December 31, 2017
 
  $     $     $     $  
Revenue    359,504       340,071       1,370,432       1,280,014  
Expenses                      
Cost of sales    328,591       295,978       1,233,479       1,098,086  
Selling, general and administrative expenses    24,061       23,609       87,655       90,076  
(Gain) loss on sale of non-financial assets   3       5       (204 )     (75 )
Restructuring costs, net   -        54       1       (180 )
Operating income   6,849       20,425       49,501       92,107  
Interest expense   12,183       10,467       48,059       42,021  
Other (income) expense    (41,334 )     20,130       (40,790 )     21,990  
Income (loss) before income taxes   36,000       (10,172 )     42,232       28,096  
Income taxes    (1,989 )     7,916       (3,174 )     12,838  
Net income (loss) for the year   37,989       (18,088 )     45,406       15,258  
Other comprehensive income (loss)                      
Items that will not be reclassified to net income (loss):                      
Remeasurements of pensions   (11,701 )     (6,916 )     17,021       (27,563 )
Remeasurements of post-retirement benefits   42       (2,491 )     7,532       (2,763 )
Items that may be subsequently reclassified to net income (loss):                      
Cumulative translation adjustment   16,005       5,357       25,952       (21,762 )
Total other comprehensive income (loss) for the year   4,346       (4,050 )     50,505       (52,088 )
Comprehensive income (loss) for the year   42,335       (22,138 )     95,911       (36,830 )


Kruger Products L.P.
Consolidated Statement of Cash Flows
(thousands of Canadian dollars)
                       
  3-month
period ended
December 31, 2018
    3-month
period ended
December 31, 2017
    12-month
period ended
December 31, 2018
    12-month
period ended
December 31, 2017
 
  $     $     $     $  
Cash flows from (used in) operating activities                      
Net income (loss) for the year   37,989       (18,088 )     45,406       15,258  
Items not affecting cash                      
Depreciation   12,920       12,875       50,943       51,289  
Amortization    348       317       1,426       1,092  
Loss (gain) on sale of property, plant and equipment   188       (1 )     622       (3 )
Change in amortized cost of Partnership units liability   (42,573 )     18,835       (41,857 )     23,013  
Foreign exchange loss (gain)   1,308       931       1,431       (1,387 )
Change in fair value of derivatives   (69 )     364       (364 )     364  
Interest expense   12,183       10,467       48,059       42,021  
Pension and post-retirement benefits   3,104       2,572       12,954       10,111  
Provisions    (95 )     67       (9 )     278  
Income taxes   (1,989 )     7,916       (3,174 )     12,838  
Loss (gain) on sale of non-financial assets   3       5       (204 )     (75 )
Total items not affecting cash   (14,672 )     54,348       69,827       139,541  
Net change in non-cash working capital    61,577       (9,235 )     26,968       (35,194 )
Contributions to pension and post-retirement benefit plans   (2,904 )     (3,731 )     (15,212 )     (15,137 )
Provisions paid   -        (633 )     (247 )     (1,648 )
Income tax payments   (615 )     (423 )     (2,478 )     (3,592 )
Net cash from operating activities   81,375       22,238       124,264       99,228  
Cash flows from (used in) investing activities                      
Purchases of property, plant and equipment (PP&E)   (10,565 )     (17,849 )     (33,647 )     (68,127 )
Purchases of PP&E related to TAD2 Project   (13,851 )     -        (26,638 )     -   
Capitalized interest paid   (184 )     -        (184 )     (497 )
Government assistance received   18,044       774       19,226       4,646  
Purchases of software   -        (689 )     (1,023 )     (1,149 )
Proceeds on sale of property, plant and equipment   (3 )     (4 )     320       1,180  
Net cash used in investing activities   (6,559 )     (17,768 )     (41,946 )     (63,947 )
Cash flows from (used in) financing activities                      
Proceeds from long-term debt  289,754       7,957     484,755
      28,834  
Repayment of long-term debt   (199,384 )     (20,789 )   (326,900
)     (26,039 )
Payment of deferred financing fees   (14,386 )     -        (18,489 )     (12 )
Interest paid on long-term debt   (8,691 )     (14,171 )     (34,351 )     (33,101 )
Distributions and advances paid, net   (1,132 )     (5,555 )     (19,506 )     (31,547 )
Net cash from (used in) financing activities   66,161       (32,558 )     85,509       (61,865 )
Effect of exchange rate changes on cash and cash  equivalents held in foreign currency   1,978       877       2,271       (1,134 )
Increase (decrease) in cash and cash equivalents during the year   142,955       (27,211 )     170,098       (27,718 )
Cash and cash equivalents - Beginning of year   26,929       26,997       (214 )     27,504  
Cash and cash equivalents - End of year   169,884       (214 )     169,884       (214 )


Kruger Products L.P.
Segment and Geographic Results
(thousands of Canadian dollars)
                       
  3-month
period ended
December 31, 2018
    3-month
period ended
December 31, 2017
    12-month
period ended
December 31, 2018
    12-month
period ended
December 31, 2017
 
  $     $     $     $  
Segment Information                      
Segment Revenue                      
Consumer   295,817       276,432       1,124,553       1,040,428  
AFH   58,551       62,231       231,087       233,321  
Other   5,136       1,408       14,792       6,265  
Total segment revenue   359,504       340,071       1,370,432       1,280,014  
Segment Adjusted EBITDA                      
Consumer   26,400       32,207       119,643       138,158  
AFH   (4,809 )     1,395       (12,844 )     6,235  
Other   (1,283 )     73       (4,510 )     (163 )
Total segment Adjusted EBITDA   20,308       33,675       102,289       144,230  
Reconciliation to Net Income (Loss):                      
Depreciation and amortization   13,268       13,192       52,369       52,381  
Interest expense   12,183       10,467       48,059       42,021  
Change in amortized cost of Partnership units liability   (42,573 )     18,835       (41,857 )     23,013  
Change in fair value of derivatives   (69 )     364       (364 )     364  
(Gain) loss on sale of property, plant and equipment   188       (1 )     622       (3 )
(Gain) loss on sale of non-financial assets   3       5       (204 )     (75 )
Restructuring costs, net   -       54       1       (180 )
Foreign exchange (gain) loss   1,308       931       1,431       (1,387 )
Income (loss) before income taxes   36,000       (10,172 )     42,232       28,096  
Income taxes   (1,989 )     7,916       (3,174 )     12,838  
Net income (loss)   37,989       (18,088 )     45,406       15,258  
Geographic Revenue                      
Canada   207,490       203,638       803,565       774,587  
U.S.   127,733       120,127       479,364       452,837  
Mexico   24,281       16,306       87,503       52,590  
Total revenue   359,504       340,071       1,370,432       1,280,014  


KP Tissue Inc.
Statement of Financial Position
(thousands of Canadian dollars)
           
  December 31, 2018     December 31, 2017  
  $     $  
Assets          
Current assets          
Distributions receivable   1,694       1,658  
Receivable from Partnership   269       -   
Income tax recoverable   230       826  
    2,193       2,484  
Non-current assets          
Investment in associate   103,143       98,674  
Total Assets   105,336       101,158  
Liabilities          
Current liabilities          
Dividend payable   1,694       1,658  
Payable to Partnership   -        52  
Current portion of advances from Partnership   -        309  
    1,694       2,019  
Non-current liabilities          
Advances from Partnership   269       731  
Deferred income taxes    4,602       1,483  
Total liabilities   6,565       4,233  
Equity          
Common shares   17,090       15,014  
Contributed surplus    144,819       144,819  
Deficit   (79,515 )     (74,952 )
Accumulated other comprehensive income   16,377       12,044  
Total equity   98,771       96,925  
Total liabilities and equity   105,336       101,158  


KP Tissue Inc.
Statement of Comprehensive Income (Loss)
(thousands of Canadian dollars, except share and per share amounts)
                       
  3-month
period ended
December 31, 2018
    3-month
period ended
December 31, 2017
    12-month
period ended
December 31, 2018
    12-month
period ended
December 31, 2017
 
  $     $     $     $  
Equity Income (loss)   4,576       (4,371 )     1,390       (3,440 )
Dilution gain    58       54       196       190  
Income (loss) before income taxes   4,634       (4,317 )     1,586       (3,250 )
Income taxes   1,808       (97 )     1,759       2,191  
Net income (loss) for the year   2,826       (4,220 )     (173 )     (5,441 )
Other comprehensive income (loss)                      
net of tax expense (recovery)                      
Items that will not be reclassified to net income (loss):                      
Remeasurements of pensions    (1,640 )     (961 )     2,334       (3,846 )
Remeasurements of post-retirement benefits    16       (243 )     776       (270 )
Items that may be subsequently reclassified to net income (loss):                      
Cumulative translation adjustment    2,679       931       4,333       (3,774 )
Total other comprehensive income (loss) for the year   1,055       (273 )     7,443       (7,890 )
Comprehensive income (loss) for the year   3,881       (4,493 )     7,270       (13,331 )
Basic income (loss) per share   0.30       (0.46 )     (0.02 )     (0.59 )
Weighted average number of shares outstanding   9,400,074       9,206,637       9,319,683       9,162,508  


KP Tissue Inc.
Statement of Cash Flows
(thousands of Canadian dollars)
                       
  3-month
period ended
December 31, 2018
    3-month
period ended
December 31, 2017
    12-month
period ended
December 31, 2018
    12-month
period ended
December 31, 2017
 
  $     $     $     $  
Cash flows from (used in) operating activities                      
Net income (loss) for the year   2,826       (4,220 )     (173 )     (5,441 )
Items not affecting cash                      
Equity (income) loss   (4,576 )     4,371       (1,390 )     3,440  
Dilution gain    (58 )     (54 )     (196 )     (190 )
Income taxes   1,808       (97 )     1,759       2,191  
Total items not affecting cash   (2,826 )     4,220       173       5,441  
Net change in non-cash working capital    -       -       -       478  
Tax (payments) refunds   736       -       462       (1,999 )
Tax Distribution received   -       -       -       481  
Advances received   -       -       274       1,040  
Advances paid   (736 )     -       (736 )     -  
Net cash from (used in) operating activities   -       -       -       -  
Cash flows from investing activites                      
Partnership unit distributions received   1,158       1,220       4,640       4,806  
Net cash from investing activities   1,158       1,220       4,640       4,806  
Cash flows used in financing activities                      
Dividends paid   (1,158 )     (1,220 )     (4,640 )     (4,806 )
Net cash used in financing activities   (1,158 )     (1,220 )     (4,640 )     (4,806 )
Increase (decrease) in cash and cash equivalents during the year   -       -       -       -  
Cash and cash equivalents - Beginning of year   -       -       -       -  
Cash and cash equivalents - End of year   -       -       -       -  

KP Tissue Inc..jpg

Source: KP Tissue Inc.